Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Econometric analysis for assessing the efficacy of public investment / R. Dorman, Harvard University - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIOUE ETC. 197 The estimated benefits of the project are then sum of the values of the physical outputs produced during each year of its life. discounted to the date of inception at the social rate of discount. The costs are the construction cost plus estimated annual oper- ating costs similarly discounted. It will be seen that this pro- cedure is, in essence, very similar to the one followed in capital budgeting by private firms. The only divergence comes now: note is taken of the various nonmonetary effects of the project, frequently referred to as « intangibles ». No attempt is made to incorporate these « intangibles », which may be very tang ible indeed, into the analysis: that task is left for higher autho: rity and, in consequence, frequently is never performed. It is a fact of government sociology that as a result of this procedure the monetary effects of a project receive more emphasis in decision making than they should in comparison with the non- monetary effects, which tend to be slighted because they are difficult to measure and express. Nevertheless, that is how things are with the current state of the art. The econometrician has two or three suggestions to make for coping with this inadequacy, and the main object of this paper is to consider them. One expedient that I shall not con- sider is that we attempt to ascertain a full-fledged social utility function in which the various objectives I have listed above enter as arguments. I am interested only in devices that might conceivably be implemented. The first suggestion that comes to mind, however, comes pretty close to that. It is that the analyst should attempt to establish « shadow prices » for the various objectives, thereby becoming able to compute a value-sum that can be compared unidimensionally with a value-sum of costs or value-sums of benefits from alternative projects. These shadow prices would reflect the willingness of the community to trade off one type of benefit against another. For example, redistribution effects could be incorporated by ascertaining that the community was willing to sacrifice a dollar’s worth of national income in order [3] Dorfman - pag.

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